The very volatile Baltic Dry Index has been swinging up and down for the past few years:
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Baltic Dry Index, 1999-2009 (logarithmic chart)
Chart via Ron Griess of The Chart Store.
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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
"Overall household indebtedness is up from $7 trillion to almost $10 trillion since 2000. On this sum, we estimate, the American consumer has an annual interest bill of more than $500 billion; a sum, by the way, that vastly exceeds his current income growth." —Kurt Richebacher
Knowing that the vote over the weekend in Greece was really a referendum on Euro membership, a majority of the Greek Parliament said yes to staying. European Finance Ministers meet again on Wednesday to solidify the 2nd bailout package for Greece at the same time hopefully a deal is consummated between Greece and its creditors this week. The Greek 14.5b euro bond that matures on March 20th is up by 2 pts. The optimism that all will be completed and contained AGAIN to Greece has yields lower in Portugal, Spain and Italy. The iTraxx Financial Index is also narrower by...
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August 25th, 2009 at 11:42 am
Can that be traded? Does anybody have a tradeable quote for that?
That looks like FUN!
August 25th, 2009 at 11:44 am
@HTCMSI
There are several ways (if you like volatility)…
They’re called: AIG, FNM, FRE, C
August 25th, 2009 at 11:49 am
That’s not a green shoot there, since June… probably about the time China stopped stocking up on materials.
If you do want to trade this, try ESEA or DRYS, but you might not want to be on the long side just now.
August 25th, 2009 at 12:01 pm
@cvienne
You are a really funny guy! Those stocks would make me seasick. :mrgreen:
I’ve got that type of volatility in gold but I was looking for high seas specifics.
@ leftback
Those are in the right industry but they don’t seem to want to be following the index too closely. I understand there is a lot of cargo space being added to the world fleet so I assume these are a bit risky right now? I don’t know where I heard or read about tonnage being added. It probably was on this blog somewhere but it stuck in my brain. That index looks great though from a trader’s perspective. That is probably why it swings so wild is because no one can trade it
August 25th, 2009 at 12:10 pm
The two shippers mentioned obviously trade with the NAZZ, and benefit from the “flight to tech”. Any stock’s price is a function of the index now as well as its own fundamentals, because of the sheer size of ETFs and mutual funds.
August 25th, 2009 at 12:11 pm
What a country …it seems the Fed Chairman is as important to growth than consumers, if you listen to Liesman.
August 25th, 2009 at 12:14 pm
I’ve been a shipping sector bear for years and I still think the industry is in brutal shape for years to come but I would caution placing too much importance on the BDIY now because it is an imperfect index and one that is heavily swayed by short term ship supply/demand. There are futures on the index but I don’t know of any options. SEA is an ETF but it includes a lot of non-dry bulk names.
So, the BDIY is interesting to follow but I wouldn’t use it as a guiding light. There is WAY too much ship capacity out there no matter how much iron ore China imports.
Just one man’s view.
August 25th, 2009 at 12:19 pm
Steve Barry:
That’s what I don’t understand. I hear all the time about how the consumer makes up 70% of economic activity, yet not a whole lot is being done to help the consumer get back on his/her feet.
August 25th, 2009 at 12:27 pm
Since so many consumers are now among the un and under employed, I think that the operative word now is “was”.
Why help the consumer when the insurance, bank, and investment banking industries need so much help just to stay alive?
August 25th, 2009 at 12:31 pm
Meanwhile, in Bubble-land formerly known as as the USofA, the market marches higher day after day after. Incredible.
August 25th, 2009 at 12:35 pm
“Meanwhile, in Bubble-land formerly known as as the USofA, the market marches higher day after day after. Incredible.”
Throw the technical and fundamentals out the door when you know that Fed and GS are controlling the markets. This will all blow up sooner or later.
August 25th, 2009 at 1:01 pm
BDI is replacing Dow Transports as the confirmer of tops and bottoms in Dow Theory. Averaging it with a China index might smooth out the quirks Lloyd mentioned.
August 25th, 2009 at 1:01 pm
Oil and oil stocks have turned down again. We had a little Bernanke helicopter rally in gold but it’s fading now.
Note that a market that used to rally on bad news now can’t rally convincingly on good news. That’s bearish.
August 25th, 2009 at 1:07 pm
@LB,
I’m sure you notice this but oil is down and the dollar is not. Imagine if/when the dollar strengthens.
August 25th, 2009 at 1:17 pm
“Imagine if/when the dollar strengthens.”
But that can’t possibly happen, because everyone from Warren Buffett to Melissa Francis says so…..
August 25th, 2009 at 1:27 pm
Nice reversal on volatility index VIX for those watching it.
Agree that dollar will strengthen over the short to medium term. But dollar will collapse in a year.
August 25th, 2009 at 1:31 pm
There will come a time when equity markets will stop going up whenever the US$ declines. Not sure when that will occur but single digit P/Es for US stocks will be very in fashion at that stage. US$ revulsion is headed our way after another bout of deflation.
August 25th, 2009 at 1:36 pm
The VIX can’t seem to get away from that $25 anchor point. Every time it does it is just drawn right back like it was on a rubber band
August 25th, 2009 at 1:48 pm
Oil is still going down… is that allowed??
;-)
August 25th, 2009 at 2:00 pm
@leftback: I hope so. I bought some DTO the other day.
August 25th, 2009 at 2:04 pm
this headline from Yahoo Finance makes me nauseous-
“Fannie, Freddie soar as day-traders seek profit”
where is there value in these organizations- which should not even be listed-
rampant speculation- we have to be near the top
August 25th, 2009 at 2:09 pm
Macro Man was also amused by Johnny Retail playing in the GSE sandbox today:
http://macro-man.blogspot.com/2009/08/divergences.html
Japan isn’t going to like the strong yen overnight, every time China weakens, the yen gains as a safe haven.
China and commodities/materials led this rally up, and may well be showing us the way down.
August 25th, 2009 at 2:13 pm
Being an idiot, I am confused at this – should I laugh or cry ?
From briefing.com (on Yahoo finance)
…
Any uncertainty regarding Ben Bernanke’s status as Fed Chair was cleared up when President Obama nominated Bernanke to a second term this morning. The announcement didn’t have much of an impact on trading since confidence in Bernanke’s ability is most aptly reflected by the stock market’s enormous rally from March lows.
…
Bernanke’s ability reflected in stock market’s rally ? Is this a Freudian slip ?
August 25th, 2009 at 2:14 pm
EUR:JPY -0.5%, crude -3.5%. The leverage on that carry trade is about 7.
Now imagine a 5-10% rally in JPY:EUR and do the math.
There really is a lot of oil in storage.
Where do you want that delivered, Mister Blankfein, in your basement?
August 25th, 2009 at 2:18 pm
Can someone tell me why Ron Insana is back on CNBC? The guy is the dumbest MF’er alive(to quote Gen. Franks).
August 25th, 2009 at 2:19 pm
@Calvin: Because his “fund” never got off the ground (read: it failed).
August 25th, 2009 at 2:27 pm
“Can someone tell me why Ron Insana is back on CNBC? The guy is the dumbest MF’er alive(to quote Gen. Franks).”
So he can talk about how successfully ran his hedge fund aground. He might need money to pay his bills?
August 25th, 2009 at 2:32 pm
Mannwich & manhattanguy:
I know why he’s back. Do most regular CNBC viewers know that his hedge fund blew up? And pay what bills? Lawsuits from investors? ;-) I just think it is hilarious that CNBC treats him like an expert when he failed spectacularly.
August 25th, 2009 at 2:39 pm
maye the markets will end in the red today-
hopefully all the spec plays take the dive and burn all the boys playing at home
August 25th, 2009 at 2:43 pm
Really. Why does CNBC have on any of the clowns that they do? Cramer’s his buddy. That’s enough, I guess.
August 25th, 2009 at 2:59 pm
@leftback. Agreed. This has been nice bout of great “news” for bulls….the surprisingly “bullish” housing report on Friday, the reappointment of a market friendly/weak dollar Fed Chief, consumer sentiment index at a new high since 2007….all very “bullish” happenings. If all we do today is throw another doji star top up, then that’s not really great. Bears need a down tomorrow to confirm this double doji look…that’s why I said last night a close below 1008 after this action would be uber-bearish in my book.
August 25th, 2009 at 3:10 pm
Watching the $ and Treasuries as always, Andy. Few people don’t seem to realize that in addition to a $ rally pulling down gold and oil, carry trade unwinding also means that a fall in oil/gold can further strengthen the $. Fundamentals and technicals seem weak for oil here, and sentiment is extreme for the $, so draw your own conclusions. Even small bubbles can break sharply on the back side.
Let’s see how the NYMEX clowns decide to game the inventory report tomorrow. LB has Thursday (Durable Goods) marked down as the Bull Day for the week, depending on technicals and events. BTW, for those interested – TPC who comments here sometimes (The Pragmatic Capitalist) has a nice summary of the week ahead (in terms of data and likely gaming strategies) that is available at the site on weekends, which LB finds more useful than the same information from Bloomberg.
August 25th, 2009 at 3:17 pm
@LB
It will be especially interesting to see if in fact the shortage of 8.4 million barrels last week was because of the three storms in the Gulf of Mexico leaving ships at sea instead of making it to port or due to skyrocketing consumer and industrial demand (the “or” is served with a healthy does of sarcasm).
August 25th, 2009 at 3:18 pm
edit: Actually, the storms were not in the Gulf rather they approached and were cause for concern.
August 25th, 2009 at 3:28 pm
@mcHAPPY:
So cynical… One might almost assume that you think the EIA to be a sham and the NYMEX to be a den of knaves.
The 8.4 million barrels were actually in Blankfein’s basement and so was under-reported.
August 25th, 2009 at 3:48 pm
These days one must be a cynic to see through the roses.
August 25th, 2009 at 3:56 pm
I’m calling it right here.
Today.
1,037.75 is the 2009 S&P high.
If I get this right maybe LB will hire me on…..
I do make a killer whiskey sour.
:)
August 25th, 2009 at 3:59 pm
It’s official, WE have a top call at TBP !! First one in a while actually, well done, brave sir!!
Man, I sure hope you’re right. If for no other reason than this Alice in Wonderland market is soooo boring…..
August 25th, 2009 at 4:20 pm
I’m way too tentative to call a top right now. This has already gone a lot longer than I thought it would.
August 25th, 2009 at 4:33 pm
Christopher at 3:56 pm
you’ve more conviction than other TBP’ers, that’s for sure. i too hope your dead-on so’s my recent etf’s don’t go further underwater.
as to “If I get this right maybe LB will hire me on…..
I do make a killer whiskey sour.”
then what would the twins do?
August 25th, 2009 at 5:03 pm
If Christopher is right, then the Christopher Top may become as famous here as the ….. Doug Kass Bottom. :-)
August 25th, 2009 at 5:41 pm
Don’t know about top – I am too “short” to see anything that high.
But I have been watching the arbitrage between SP500 index and SPY. Last week 10 shares of SPY were 5 points higher than sp500 index. Today they are 2 points higher. E.g. On Yahoo Finance I see the after hour price of SPY to be 103.01 where as SP500 index closed at 1028.
The bullishness of the divergence is much less now. I have no idea what this means, if it means anything at all. I have been watching it only for about a couple of weeks. The premium over NAV isn’t very high – it has come down from 0.4% in May to almost nothing now.
August 28th, 2009 at 2:45 pm
[...] When the economy is strong, goods are shipped overseas. A look at the Daily Baltic Dry Index can help provide perspective regarding global economic health. (Source: The Chart Store; Hat Tip: The Big Picture) [...]